MODULE 6:  LOAD MOVEMENT PROCESS

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In this module, we go into the process of tendering loads from your customers/shippers.  This is a “high-level” overview.  More details about booking/tendering the loads from the Broker side vary depending on the load details, shipper, carrier, and TMS system used.

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Rate Quotes or Lane Bids

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Prior to a freight broker having a load tender sent/emailed to them from a potential customer and after the initial communication between the freight broker and the potential shipper, where the freight broker offered acceptable services to the potential shipper, the customer sometimes may ask the freight broker to perform a rate quote or lane bid on one of their lanes.  This is to see if the freight broker understands the process from the shipper's perspective and also to see if they can give an acceptable quote or bid.

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When the freight broker is asked by the shipper to provide a rate quote or a lane bid, there should be some common information that the freight broker needs to gather from the potential shipper prior to giving or returning a quote or bid:

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- commodity

- the lane in which the quote or bid is for

- equipment type

- pick up or delivery appointment dates and times

- accessorials, if applicable (detention, lumper, T.O.N.U., layover, pallet exchange, etc.)

- any special instructions or requirements

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Accepted Load Tenders from Customers/Shippers

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This is the stage where after the shipper ACCEPTS the rate quote or lane bid from the freight broker, the freight broker signs the load tender, accepting responsibility of moving that shipper's freight.

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Post Loads or Contact Approved Carriers Directly

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From the load list of the shipper, if you see a load on there that you believe you can potentially move quickly, either contact one of your approved carriers to check their availability of the load if they are in the area OR post the load on any of the available load boards you have in your brokerage.

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Load Tender to Rate Con

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At this stage, you have contacted the shipper to inform them you found an approved carrier to move a load.  NOTE: It is not recommended to contact a shipper telling them you want a particular load without first having an approved carrier to run the load.  The shipper will send you what is referred to as a “Load Tender”, detailing all the information needed to “build” your load (in your TMS system) and create a “Rate Confirmation” for the carrier.

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The Load Tender from the Shipper contains things such as the load number, amount being paid to the broker for the load, where the load is being picked up from with dates and times, where the load is being delivered to with dates and times, and any special instructions.  Broker is to make sure to share that all necessary information is added to the Rate Confirmation prior to sending to the carrier.  When the Rate Con is built for a particular load, the shipper information from the load tender is replaced with the carrier information and the rate on the load tender is now changed to the rate that the Broker sells the load to the carrier for.  Broker keeps the difference.

 

Example:

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Load Tender from the shipper that was accepted by the freight broker is for $5,000.  Freight broker takes 20% as a profit margin from the tender and uses the rest to broker out to the carriers.  So $5,000 - $1,000 (20% of the $5,000, which is the freight broker's margin) = $4,000 to broker to the carrier or owner operator.  Do freight brokers post the load on the load boards for $4,000?  Of course not.  They need some "wiggle" room for negotiation with the carriers, so maybe post starting from $3,500.  This is common among freight brokers.  The amount they post on the load boards and that actually gets accepted by carriers will be put on the "rate confirmations" for those carriers.

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The Rate Con now reflects details needed for the carrier to effectively run the load.  Pickup and Delivery dates and times, special instructions, commodity, weight, loaded miles, etc.

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Invoicing Customers (Shippers) and Paying Carriers (Agents)

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Once a carrier delivers the freight to the Receiver and everything checks out as being OK, the carrier signs a B.O.L. (Bill of Lading).  This is a delivery receipt, proof of delivery and the carrier’s (and Broker’s) way of being paid for a particular load.  The carrier will now either invoice the Broker directly or go through their factoring company for payment.  Also, the carrier is required to send the Broker a copy of the BOL as well so that the shipper can be invoiced by the Broker, so everyone is paid.

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B.O.L. (Bill of Lading) contains standard information such as Shipper and Receiver, pallet count, any damage claims or lost freight, any lumper charges, BOL number to properly identify the load, commodity, and carrier information.